Guarantee Tournaments -- What's in it for the site?

[thebeyonder]

Question for all you math/economics people out there. I played in the three Full Tilt guaranteed tourneys this weekend, and they ended up giving away around $50K combined for these tourneys. I was wondering if someone could explain how these tourneys can be profitable for Full Tilt, as they seem to offer them every weekend.

Even if the tourney players stick around for the whole day and generate a lot of rake, it seems unlikely that it will add up to $50K. So from a marketing/economics perspective, how do they make money off this?

[AtticusFinch]

[ QUOTE ]
Question for all you math/economics people out there. I played in the three Full Tilt guaranteed tourneys this weekend, and they ended up giving away around $50K combined for these tourneys. I was wondering if someone could explain how these tourneys can be profitable for Full Tilt, as they seem to offer them every weekend.

Even if the tourney players stick around for the whole day and generate a lot of rake, it seems unlikely that it will add up to $50K. So from a marketing/economics perspective, how do they make money off this?

[/ QUOTE ]

By people like us talking about the great overlay, going to the site, trying it out, and becomming long-term customers.

[krabby5]

I'm guessing sponsors pony up some cash..

I was playing in a beta point multi at Poker Mountain this weekend where 80 people entered that had beta points. It paid top 10...first place was $750!

And they ran these for a week

too bad I went card dead and didn't cash

[wamplerr]

"Even if the tourney players stick around for the whole day and generate a lot of rake, it seems unlikely that it will add up to $50K."

I was wondering the same thing. There were maybe 500-600 players total for these tournaments, so they would have to pay $100 in rake (that they wouldn't have otherwise) just to make up for the $50k they lost (According to the original poster).

One thought it, they gave away a $25,000 buy-in to the WPT main event...I guess since there's a chance the player who wins that will go deep (and represent FT), you get some EV from that possibility. So a $25k seat might only cost a site $15k or $20k.

Question: How much would PokerStars have paid for the Moneymaker/Raymer publicity? They could have given away 200 seats every year if they were guaranteed they'd get the winner.

[usmfan]

I'm not sure of the exact tourneys you're referring to but here goes my take:
A lot of the tourneys that are guaranteed still charge for the entry. Most, if not all, of the pool is made up from entry fees + rake. I.e., 500 players for the 25k guaranteed at 50+5 = 25k in prizes + 2500 in fees for the site. Overlays are usually not terrible big between the total amount collected and the payouts.
As for freerolls, entry is either points (from playing raked hands) or free (but with a lower prize pool). For those, I would defer to the discussion already made here re: publicity, etc.